IBM has been awarded a contract extension to provide its Strategic Trace Solution to the NHS Test and Trace service for England, securing additional fees of around £20m on the deal signed last year.
In a tender document published this week, the government revealed it has agreed to pay Big Blue £47.7m including the £25m fee agreed to work on the controversial Test and Trace service. The extension takes the supplier's expected time on the project until November 2023.
This follows an extension until September 2023, as per a contract announcement in July, which provides an IBM-built system based on the Salesforce platform.
Those changes were necessary because the IBM contract was drawn down from a framework agreement worth up to £3bn, which is due to come to an end in September 2021.
In the notice published in July, the Department of Health and Social Care said: "IBM is providing the overall Trace solution that has been launched and is already deeply integrated and embedded within systems. Due to the critical nature of the Trace programme, it would not be feasible for another supplier to provide these additional roles and adding another contractor to the mix would leave the solution open to disruption. IBM's personnel have the required expertise as to the solution and as IBM is a re-seller of Salesforce licences under the contract."
The notice said the value of the deal at the conclusion of the existing contract was £25m. That tallies with an earlier report from the National Audit Office [PDF], which put spending on IBM at £21m up to the end of March 2021. The total spend on Big Blue was set to be £46m, it said.
By far the biggest beneficiary of the Test and Trace programme, which spent £13.5bn in 2020-21, among consultancies, was Deloitte, which had an estimated contract value for £298m. The overall budget for Test and Trace is £37bn.
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A report by spending watchdog the Public Accounts Committee (PAC), published in March, said Test and Trace failed to deliver on the central promise of averting another lockdown, which came before Christmas, followed by a third, more severe lockdown in the new year during the second wave.
Published in March, the PAC report said there was no clear evidence of Test and Trace's overall effectiveness and it was not clear whether its contribution to reducing infection levels justified "unimaginable" costs.
Although Test and Trace had to be set up and staffed at incredible speed, it must now "wean itself off its persistent reliance on consultants," the committee of MPs said.
Clearly, IBM is one of the IT support and consultancy organisations not quite ready to be weaned. ®